Lithuanian E-cigarette Retailer Suspected of VAT Fraud
According to Lithuanian media reports, an e-cigarette retailer based in Kaunas is allegedly involved in evading payment of over 800,000 euros in value-added tax (VAT).
Three employees of this company are suspected of being involved in high-value fraud and the illegal use of taxable goods, with a value exceeding 9 million riyals.
The official statement indicates that this investigation is being led by the Kaunas Regional Prosecutor's Office, with the support of officials from the Kaunas Regional Tax Crime Investigation Department (FNTT).
The investigation was initiated due to suspicions that the company was engaging in remote sales of e-cigarettes and the necessary e-liquids on its website, despite such activities being explicitly prohibited by Lithuanian law.
According to available information, the company's previous website was blocked by the court due to illegal sales of e-cigarettes and e-liquid. However, the company subsequently created another website and continued to illegally sell its products.
These three implicated employees have been accused of falsely claiming that the company had sold these products (e-cigarettes and e-liquids) to companies registered within the European Union, in order to circumvent the ban on selling taxable goods online.
According to these potential fraudulent transactions, it is alleged that individuals involved illegally obtained over 800,000 euros in value-added tax refunds. As a result of these potential fraudulent transactions, there may have been a misapplication of the 0% value-added tax rate, resulting in 800,000 euros in unpaid value-added tax that should have been included in the national budget.
In order to gather as much investigation-relevant data as possible, officials from the FNTT conducted searches of the residences, vehicles, and vessels of the suspected individuals. During one such search of an employee's residence, an extensive sum of over 900,000 euros in cash was discovered.
The ongoing pre-trial investigation is being led by Vingaudas Rinkevičius, the Chief Prosecutor of the Third Criminal Prosecution Department of the Prosecutor's Office in the Kaunas District.
According to the criminal law, the most severe punishment, which can lead to a maximum of eight years of imprisonment, is prescribed for illegally obtaining high-value external assets or property rights, as well as for the illegal use of taxable goods valued at over 9 million Litas.
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